Louisiana, 1995. Detectives Martin Hart and Rustin "Rust" Cohle investigate the ritualistic murder of former prostitute Dora Kelly Lange, found with a symbol painted on her back and wearing a "crown" of deer antlers, blindfolded anduuh posed as if praying to a large solitary tree. A twig latticework, like a Cajun bird trap, is found with her body. Cohle is convinced that this is not the killer's first victim, but Hart is skeptical. Their investigation brings up the case of Marie Fontenot, a little girl whose disappearance five years earlier was not investigated. Another report is brought up, of a child who claimed to be chased through the woods by a "green-eared spaghetti monster." Hart invites Cohle over for dinner, unaware that it is Cohle's deceased daughter's birthday. Cohle reluctantly accepts but, losing a battle with alcoholism, turns up drunk. Hart and Cohle follow up on the Fontenot disappearance with a visit to Marie's uncle Danny. In a dilapidated playhouse, Cohle finds another twig latticework.

Seventeen years later, Cohle and Hart are interviewed separately, five days apart, about Dora Kelly Lange by Detectives Thomas Papania and Maynard Gilbough. Hart and Cohle have not spoken in ten years after a falling-out in 2002. Cohle is shown a photograph of another girl whose body has been found posed in similar fashion to Lange. Papania and Gilbough want to know how the killer could have struck again if he was caught in 1995.

In 1995, Cohle and Hart continue to investigate the murder of Dora Lange, and learn she was attending church prior to her disappearance. Cohle deduces that Hart is cheating on his wife, Maggie, with Lisa Tragnetti, creating friction between the two. Cohle is also experiencing hallucinatory synesthetic side effects to his drug consumption and is contemptuous of Reverend Billy Lee Tuttle's lobbying for creation a special task force focusing on "anti-Christian crimes" to assist in the investigation. While buying drugs from a young prostitute, Cohle is pointed towards a trailer park of runaway girls. The two find Lange's diary at the park and learn the location of the church, which was destroyed in a fire. While searching through the wreckage, they find on a wall a nightmarish painting of a woman with deer antlers.

Seventeen years later, Papania and Gilbough continue their interviews of Cohle and Hart. Hart is divorced, and Cohle confides that his daughter died after being involved in a car accident, leading to the collapse of his marriage and the beginning of his addiction. To avoid prosecution for killing a meth user who had injected his own infant child with the drug, Cohle's superiors compelled him to be a "floating" drug undercover officer for four years, until he was hospitalized in a psychiatric institution after shooting three cartel members and being wounded in the gunfight. After his release, Cohle's request for another job resulted in his becoming a homicide detective with CID, where he was partnered with Hart.

In 1995, Hart and Cohle locate the owner of the burnt-down church, preacher Joel Theriot, learning that Dora Lange was often seen with a tall man with facial scarring, and begin searching for him while being pressured to turn the case over to the task force. Hart begins to reconnect with Maggie despite her fascination with Cohle, and assaults Lisa's new boyfriend out of jealousy, questioning his own morality. Cohle goes through dead body files in search of cases similar to Lange and learns of Rianne Olivier, a supposed accidental death that shared elements with Lange's murder. They learn through Olivier's grandfather that she attended Light of Way, a religious school owned by Reverend Tuttle, before running off with her boyfriend Reggie Ledoux, a drug dealer, repeated sex offender and former cellmate of Lange's ex-husband, and head out to question Ledoux.

In 2012, the Papania and Gilbough interviews of Hart and Cohle identify their character flaws, particularly Hart's hypocritical views on morality and Cohle's nihilistic view of the world.

In 1995, Hart and Cohle interrogate Charlie Lange for information about Ledoux, his former cellmate. Lange informs them that he showed pictures of Dora to Ledoux and identifies a known associate, Tyrone Weem, as a lead. Lange also tells the detectives that Ledoux told him about a group of rich men who would get together for sacrifices of women and children for devil worship. Hart tracks down Weem at a warehouse rave and forces him to name the East Texas biker gang Ledoux is now cooking meth for, the Iron Crusaders. Cohle, who previously worked with the gang while undercover, takes "sick leave" to infiltrate the gang, giving the excuse that he needs to visit his dying father. Meanwhile, Lisa spitefully tells Maggie everything about her affair with Hart, who returns home to find his family gone and his bags packed. He tries to talk to Maggie at her workplace and is confronted by security officers before Cohle arrives to take him away. Cohle hits the Iron Crusaders hangout masquerading as former security for a Mexican cartel breaking away on his own, using high-grade cocaine taken from the police evidence room to back up his claim. He negotiates with his contact Ginger that if given a commitment to back a deal with the gang's meth producer, Cohle will help Ginger rob a stash house in the projects. Disguised as police, they rob the stash house, shooting one of the residents, and stir up the neighborhood's inhabitants in the process, resulting in an outbreak of gunfire and chaos. With the actual police on their way, Cohle holds Ginger at gunpoint as they escape the house and make their way through the projects. Cohle contacts Hart who collects them from the scene as the police arrive.

In 2012, doubts in the investigation start to come forth as Papania and Gilbough question Cohle's sick leave, claiming that there are no hospital records of his father. Cohle tells the detectives about his father while Hart feigns ignorance.

In 1995, Ginger and Cohle (still undercover) meet with DeWall, Ledoux's cook partner, in a roadside bar. DeWall refuses to do a drug deal with Cohle, but after DeWall leaves, Hart follows him. Hart radios his location to Cohle and the pair meet up near the hidden meth lab in the bayou, where Cohle leads the way through brush, avoiding hidden explosive booby traps rigged to kill unwary intruders. The pair descend on the house where Hart apprehends Ledoux and handcuffs him. Cohle draws down on DeWall, who has just stepped out of the meth lab, as Hart is searching the premises, coming across two kidnapped and abused children, one of them dead. Enraged, Hart kills Ledoux with a shot to the head. DeWall panics and flees but is killed when he detonates one of the booby traps. Hart removes the handcuffs from the dead Ledoux and Cohle sprays the yard with bullets from an AK to give the appearance that a shootout had taken place. In their 2012 interviews (voiced over the actual events) and later before a shooting board, the pair separately relate identical concocted stories of surviving a chaotic firefight in which Hart managed to kill Ledoux. Hart and Cohle are hailed back at the station and in the press as heroes, with both receiving commendations and promotions.

By 2002, Hart is reconciled with his wife and kids, while Cohle has a physician girlfriend. Hart's daughter Audrey has begun acting out and tensions rise once again in the household. Cohle, a renowned interrogator, is brought in to get a confession out of a robber accused of murdering two people in a store while high on PCP. After confessing, the prisoner demands a deal from Cohle, declaring that Ledoux wasn't the killer of the missing girls—the real killer was connected to people high up and, he claims, he himself heard about the "Yellow King," information in the Dora Lange case withheld from the public. Cohle beats the man, demanding "a name," but is restrained by other detectives. He returns later with Hart to find that the prisoner has killed himself in his cell after receiving a phone call (purporting to be from his lawyer) made from a public pay phone out in the middle of nowhere. Cohle returns to the abandoned religious school, where he finds dozens of stick sculptures, and drawings and black stars on the walls.

In 2012, Papania and Gilbough tell Hart that they suspect that Cohle, who they allege conveniently led Hart to every clue or lead in the case, has been behind the killings all along; Cohle has been spotted among the bystanders at the scene of the recent killing in Lake Charles that is similar to the Dora Lange case. Cohle has also been a person of interest in the suspicious death of Reverend Tuttle two years before. Cohle walks out of his interview after the detectives accuse him, ridiculing them to get a warrant, while Hart is asked in his interview to explain what exactly happened between him and Cohle in 2002.

In 2002, Cohle investigates on his own a series of old missing persons cases, linking the victims to the Tuttle schools. He seeks out Theriot, who has since quit the ministry and become a drunk, to ask about Wellspring, a defunct foundation that financed the rural schools while Theriot was a seminarian at the college Tuttle established. Theriot claims that Wellspring covered up child molestation scandals and implies that he was intimidated into silence after being questioned in 1995. Cohle tries to interview Kelly, Ledoux's surviving victim in 1995 and institutionalized with regressive catatonia, to ask her if a third man was involved with her abduction. She describes a giant man with scars, and begins screaming when Cohle asks about the man's face. Despite being ordered to stop his investigations, Cohle meets with Tuttle, ostensibly seeking the names of former Wellspring employees but actually fishing for reactions from him. Tuttle tells him that once the government enacts a new school voucher program, he is going to reintroduce the Wellspring concept. Tuttle complains to the department, misrepresenting the nature of the meeting, which Cohle cites as proof of his culpability, but is suspended from duty anyway. Hart runs into Beth, a former underage prostitute he interviewed during the Dora Lange investigation, and starts an affair with her. A suspicious Maggie checks Hart's cell and finds a picture of Beth. She goes to Cohle's apartment and seduces him; Cohle, disgusted and infuriated when Maggie tells him she had sex to get rid of Hart, kicks her out. Maggie tells Hart anyway, who attacks Cohle in the department parking lot. Cohle quits immediately after.

In 2012, Papania and Gilbough interview Maggie, now remarried. She is scornful of their motives and denies that the divorce from Hart had anything to do with Cohle. Asked to characterize Cohle, she describes him as a good man with integrity. Hart abruptly walks out on his interview when Papania and Gilbrough again suggest that Cohle may have killed Tuttle in 2010 and been responsible for all the other murders. Cohle follows Hart and initiates their first contact since the fight. Cohle asks Hart to buy him a beer, saying they should talk.

In 2012, Cohle prods a disinclined Hart to assist him in finding the man with the facial scars by reminding Hart that he, in addition to Cohle, owes a moral debt for what actually took place in 1995. He takes Hart to a self-storage facility where he convinces him of the existence of a cult that mixes elements of the courir de Mardi Gras, santería and voudon in its rites and shows him evidence he has compiled linking Tuttle and possibly others in the disappearances of dozens of women and children going back to the 1980s. Cohle admits burgling Tuttle's homes to obtain proof of his complicity, including photographs and a videotape of the ritualistic sacrifice of Marie Fontenot years ago. However he denies killing Tuttle, speculating that others believed Tuttle was going to be blackmailed over the videotape and killed him to prevent it. Hart finds a Ledoux relative who confirms that Reggie and DeWall were connected to the man with scars, and locates a former domestic who worked for Tuttle's father Sam when they still lived in Vermilion Parish. She recalls a scarred boy who was one of Sam Tuttle's illegitimate grandchildren from his "other" family, named Childress. Hart also discovers that the Vermilion Parish deputy originally handling the Fontenot disappearance was Hart's old friend (and Cohle's antagonist) Steve Geraci, who concealed the fact in 1995 and has since gone on to become a parish sheriff. Feeling out Geraci, Hart concludes that a coverup of Marie Fontenot's abduction was engineered by then-Vermilion Parish Sheriff Ted Childress. Hart and Cohle kidnap Geraci to coerce the details from him. Meanwhile, Gilbough and Papania are lost trying to locate a rural church Cohle mentioned in his interview and ask directions from a man on a riding lawnmower in a parish cemetery. Impressed by his local knowledge, Papania nonetheless fails to notice his badly scarred lower face before driving away. The man thinks aloud: "My family's been here a long, long time."

The scarred killer is shown in his home, a large, messy house. He lives and has sex with his mentally challenged half-sister, spouts his philosophies in a variety of voices and accents, and keeps his father's corpse in a shed out back, which is covered in arcane paintings. He is also shown painting a school building, where he watches two girls spinning in circles and uneasily makes eye contact with a young boy. Cohle and Hart interrogate Geraci, getting him to talk by showing him the cultists' tape of the Fontenoit sacrifice. They learn that the sheriff at the time of Fontenoit's disappearance was named Childress, and covered up her disappearance. They hit another dead end in the investigation until Hart notes the significance of the Eirath "spaghetti monster"'s green ears, and the possibility that the green may have come from paint. Tracking down houses painted in the area during that time, they find a small business called "Childress and Son", which employed a man with scars on his face. Driving to the home of William Childress, the owner of the business, Cohle immediately recognizes it as the home of their killer. Errol Childress, the scarred man, flees and is pursued by Rust and Hart into a large overgrown labyrinthine structure in the woods - Carcosa. In the innermost chamber of Carcosa, Cohle hallucinates a spiraling alien galaxy when he is suddenly attacked by Errol. After a struggle with Errol, who stabs Cohle in the stomach and throws an axe into Hart's chest, Cohle finally shoots Errol in the head, killing him. Papania and Gilbough, who were called to the scene by Hart, arrive with backup and find Hart clinging to the unconscious, critically wounded Cohle. After a long stay in the hospital, both men manage to recover from their wounds. There, Hart wheels Cohle out of the hospital and they talk in the parking lot. Cohle reveals that when he was comatose, he felt the presence of his daughter, and has come out of the experience with a significantly more hopeful outlook on life. Cohle describes a universal battle between light and dark. Based on the night sky, Hart notes that the dark has much more territory. Cohle responds, "In the beginning, there was only dark. You ask me, the light's winning."